Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
They warned in Q3 that there would be an adjustment to repositioning costs in Q4. Repositioning costs through Q3 were $36.970 million. The earnings release said the final repositioning charges were about $38.6 million through the end of the year.
Mickey,
IDCC granted some additional incentive shares in Q4 as part of the bonus and incentive comp plan. These shares are being recognized in fully diluted shares at year end. Based on my calculations, IDCC is reporting about 44.1 million fully diluted shares for the earnings calculation.
Ronnie,
Q4 has an additional repositioning charge of $1.6 million that I excluded from operating expense as it is net really comparable.
Ronnie,
That explains the increase in operating expenses in Q4 over Q3 of $5.1 million. Removing the incentive compensation adjustment in Q3 of $4 million would mean that Q4 operating expenses only increased about $1.1 million. That is more in line with expectations. Thanks for reminding me of that adjustment in Q3.
Here is what I make of the earnings.
Operating revenue of $76.4 million
Operating expenses of ($35.6) million (includes $1.6 million additional repositioning charge for Q4; also operating expenses are up about $5.1 million over Q3; per Ronnie, Q3 expenses were lowered by $4.0 million for adjustments to incentive comp so real increase is only $1.1 million)
Other Income (Loss) of ($3.2) million (reflects interest of about $700k less impairment loss of $3.9 million)
Income tax expense of ($15.2) million
Foreign tax credit benefit of $16.4 million
Equals net income of $38.8 million
Common shares of approximately 44.633 million
The difference between net income and pro forma net income is $8 million. That amount seems to represent some kind of foreign tax credit that was recognized in Q4.
I am in agreement that this is a poor showing for our CFO. There better be some good news in that earnings release and I hope a new licensee announcement.
Mickey,
I am not a premium member of IHUB and cannot respond to your private message except through here. Assuming we hit the revenue target of $76.4 million and barring any additional significant bonuses or surprise expenses in Q4, I would be very surprised to see IDCC come in below $.70 in earnings in Q4.
Looking at some additional numbers, if we see income of $30.9 million for Q4, that means we will see $79.352 million for the year 2009 resulting in per share earnings of $1.83. If you remove the respositioning charge of $38.47 million and the tax effect of that charge, you get proforma income of $104.2 million which results in earnings per share of $2.40.
Looking forward to 2010, I see revenues of about $312 million and income of $129 million resulting in earnings per share of $2.98 assuming no new licensees and no additional stock buyback. That represents a forward looking P/E of 8.72 and no recognition of existing cash per share. If you reflect the current value of cash, then we are trading at 5.4 times forward looking earnings. The existing stock price is absolutely crazy.
Are we being manipulated or what?
In addition to your revenue estimate of $76.4 million, I am looking for operating expenses of $29.4 million (includes additional $1.5 million of repositioning expense), interest income of $.5 million, income tax expense of $16.6 million (35% tax rate) and net income of $30.9 million. If you assume there were no stock buybacks in Q4, then EPS should be about $.71 per share based on 43.350 million shares.
I'm really surprised we didn't get our ususual sell off prior to options expiration tomorrow. I figured after the lousy jobs report this morning and inflation fears, the shorts and MMs would have no problem taking us down to 25.
Do we have a new reputable market maker that is keeping the others in line? Or maybe our new COB has some friends on Wall Street that are eying our stock price to keep it within reason. Whatever it is, it is like a breath of fresh air.
Internet,
This comment from the article looks promising. I believe Wave was involved with this pilot program and it appears it was successful. That is very reassuring.
"One of the keys to the DIB effort has been the overall philosophy of trust," he says. "What the pilot program proved was we could institutionalize an information sharing apparatus that allows two-way trust and collaboration. That has been one of the fundamental goals. One of the success features of the DIB has been achieving that goal."
Does anyone have the outstanding shares for each of the years from 2001 through 2009? It would be interesting to see if the stock buybacks directly correlate with the stock grants and awards over the years. I'll bet there is more than a coincidence here. There were minimal stock grants awarded in 2009 and therefore little incentive to carry out the stock buyback that was announced last year. I think that last stock buyback was announced based on the belief that Nokia would have licensed in 2009.
Do you think the increase in short positions is at all related to the recent article that was published about hacking TPMs? Think about it. It is definitely time to bury these morons.
The TCG can turn this study into a bonanza about the real security afforded by TPMs. The next story line should read "Would you spend $200,000 and three months time to hack a brick?"
You hit the nail on the head!!!
Once the laptop containing the TPM is reported missing the laptop contents will be wiped clean by the network administrator before the TPM can be hacked. If the hackers spend a couple hundred thousand dollars to unlock a brick, they will get the message real quick. This makes Waves software even more valuable than ever. The TCG needs to broadcast this message to the heavens. The software companies will rue the day they paid for this study.
Data,
I believe you are correct that IDCC is not involved with Trusted Platform Modules (TPMs). TPMs are hardware security chips used in PCs and digital cell phones. TPMs are used to store identification numbers, passwords and M2M commands in silicon so it is never exposed to the operating system. Hackers normally gain access to this information through holes in a computers operating system or other programs that can expose the operating system. TPMs have been installed into about 300-500 million PCs to date and many other appliances as well. It is still a rather new technology and is only now getting some press exposure. TPMs are also giving security software vendors a run for their money.
Hacking a TPM can be done with enough time, money and technology. What they failed to mention is that each TPM chip has a unique identification number and code so even if you hack a chip, you have only gained access to the contents of one chip. You would have to perform the same procedures on every chip that you want to hack and that is totally impractical. I believe the hacker said it took him six months to crack one chip using specialized equipment. There are also other layers of security you can impose on the chip to make it more difficult. I'll bet the software vendors paid for this study to slow down acceptance of hardware security applications over software versions. I'm betting hardware will easily win over software security applications and the government will be the biggest driver of the change.
For now, I do not believe IDCC is involved in these security applications but that could change in the future.
Encino,
That is exactly how I perceive the success of charts. If everyone reads them and reacts accordingly, their message will come true. I am not a daytrader and tend to trade on expected news or changes in operating results. People who trade on charts are usually trading frequently and that's not my style. I don't want to take a chance of missing out on the next big leg up on a news event or public disclosure. Wave could have either at any given time and this stock has the potential to move quickly. I have built my position over time and will hold until my expectations are met or a better stock comes along. I am hoping though for a pleasant surprise with 4Q earnings to keep this stock in a steep uptrend.
Now I need help! I tried to view the Intel vpro demonstration and I get weird colors in all the images. This happens a lot with Windows Media. Is there a quick fix for this problem?
Secondly, does Wave get $7.50 for every encrypted drive sold by Seagate? I though it only applied to every encrypted Seagate drive sold by Dell.
One of the single biggest factors for the meteoric rise in Wave's share price in the late 90's besides the stock market bubble was the $134 million financing deal consumated by Wave at a price that I believe was above $20.00 per share. That money was used to develop the Wave chip and Wave Express. It also kept them in business while they were reinventing themselves as a security company. Without that financing, Wave would have never survived the market bust in 2000. I don't remember who they did that financing with but it was a Godsend.
Escrow,
And don't forget that Wave is part of the Standard but I will bet that all members of the TCG were required to make their tecnology contributions available to third parties. The question is can Wave get royalties from any of its patents? My thinking is no unless we can add metering to the mix of services provided.
bigbob,
What year did Wave get back on NASDAQ. I still have an original (unused) shirt, hat and coffee cup that were sold as promotions for the event. I plan to keep them for the Wave museum one of these days. I think I still have some money on deposit with Wave when they came out with the metering chip.
It's got to be pretty close because I don't believe they have much expense in interest, income taxes, depreciation and amortization. What are their depreciation and amortization numbers? Depreciation was about $400,000 for the year 2008. That means about $100K quarterly. There should be no income tax expense in Q4 either. There was no interest expense in 2008 but there were impairment loss write-offs of $450,000. We could see another impairment loss in Q4 2009 that may put us in an annual loss position but I hope the market ignores it.
I thought I heard in the presentation that Steven said Wave was the only company that was cash currently flow positive in this space. Is that a slip of the tongue ahead of the earnings announcement? I heard the comment at 26:55 into the presentation.
JD,
Does this mean that Wave is registering additional stock for its Employee stock option plan? As much as I hate to see more dilution, it would bode well for the stock to see the employees eager to get new shares. I guess that's why they don't need to buy shares in the open market when they can get them for free through employee grants.
Imalurker, it takes a while for it to load. Just be patient and give it time. it doesn't look like it is doing anything but it is loading. My machine took several minutes for it to load.
Who are all of the new attornies that were added to the case in November. There is a bunch of them. Seems like we may have some added legal expense in the fourth quarter if all of these people were actively working on the appeal.
After IDCC lost the Motorola trial, it took many years for them to recover. As soon as Bell Atlantic (Verizon) and Sprint comitted to CDMA, QCOM never looked back so I would have to say QCOM overtook IDCC from a technology standpoint in the 1995-1997 era. I don't remember when Korea comitted to CDMA but I believe it was after Bell Atlantic and Sprint.
IDCC is certainly older than QCOM but QCOM was much better funded than IDCC (or IMM) at the time. IDCC needed funds for its litigation battles and had no idea as to the value or future success of the CDMA technology. I guess IDCC thought it was a good deal at the time. It only became a bad deal in hindsight.
Goodbuddy,
That deal with QCOM was made in desparation after IDCC's loss to Motorola in 1995. IDCC was running out of cash and needed something to stay alive. IDCC's foundational CDMA patents were needed by QCOM in order to become a sole source provider of CDMA technology for IS-95. That is something QCOM desparately wanted so they could control the cost of the IPR for CDMA and promote themselves as a sole source provider. As a sole source provider of CDMA, the royalty costs were much cheaper than for TDMA or GSM.
IDCC didn't realize the value of the patents that it was sitting on and no one knew how substantial the CDMA technology would grow. I don't even think Verizon and Sprint announced their support for CDMA until 1997 and were quickly followed by Korea. We all know what this did for QCOM.
If IDCC hadn't lost their case to Motorola, I doubt this agreement with QCOM would have ever been reached. The true cost of the Motorola debacle will never be known but I venture to guess it was in the tens of billions.
The article says large institutions don't want any new rules because they make money by lending their stocks out. How do large institutions make money by lending their stocks out?
Jeffree,
If IDCC were a product company, I would agree with you. However, being a patent based company with royalties as its main source of revenue, I believe IDCC may want to keep a lower profile. Nothing riles the industry more than a patent company that is making boat loads of money.
QCOM doesn't really tout is royalty business any more but it does like to announce new and improved product offerings.
Triangle,
I came to that same conclusion after reading the article. Perhaps IDCC and Infineon can create a chip to work with Apple's world I-Phone. Or perhaps IDCC and Qualcom could co-develop the chip. The market for that chip would be substantial. Then you could have phone producers selling products across multiple platforms using the same chip. It would certainly simplify things.
So if Vasco is $75/yr for three years, that is $225 over a three year period compared with Wave at $105 over a three year period. I am assuming both include maintenance. It seems like Wave is considerably cheaper than its competition, make that more than 50% cheaper than its competition. And I believe Wave offers a better product for use with OpenID platforms. These kinds of numbers make marketing folks salivate.
I believe the tax is determined based on asset values and available exemptions at the time of death, therefore I think the year of death sets the precedent.
Oops, I thought Harry perished in 2010. There is an unlimited exemption for estate taxes in 2010. There would not be very much in the way of estate taxes in 2009 either but the exemption is not unlimited like 2010. It reverts back to normal in 2011 so if you are going to die and you have a sizable estate, you better die in 2010.
If Harry's been sick, I'm sure he has designated a family person or business adviser to look after the assets in his estate/trust. Everything was probably put into a trust with a family member or business adviser signated as the trustee a long time ago. I'm sure the trustee would have been counseled on investment portfolios, life insurance, real estate holdings and business holdings. The portfolios are the easiest things to convert to cash to pay expenses from the estate pending life insurance proceeds. Selling real estate and businesses takes a lot more time. I wouldn't be a bit surprised to see some of his IDCC stock being sold.
Harry also left this world in the only year that there is zero estate taxes. Talk about good timing.
Did you see the last news release that mentioned Wave? Another company (Merix) was highlighted for reporting quarterly earnings of $500,000 or $0.02 per share. The stock jumped $.53 and closed at $2.85. That's where WAVX will be when it releases its earnings for the fourth quarter of 2009. I can't believe people are selling this stock now. We should blow through $2.00 in short order.
Vader, I just took 5,000 off their hands.
Captain, I think I am in your camp on this one. The street always knows ahead of time. This increase in volume spells new investors to me. I tried to buy 5,000 shares at $0.01 under the ask last Thursday and no one would bite. This stock is wound tighter than a Chinese finger puzzle right now.
Wow, I didn't even know Harry was sick. Was this a sudden death?
dws, this is all being set up by Nokia to get cross licensing for Apple's touch screen patents. That is what Nokia really wants. It would be an interesting play for Apple to acquire IDCC and offer cross licensing for IDCC's patents. Apple does not want to give Nokia access to its touch screen patents.